Aldeyra Therapeutics, Inc.

Hello, everyone, and welcome to the Aldira Therapeutics Phase 3 data call. My name is Carla, and I will be coordinating your call today. During the presentation, you will have the opportunity to ask questions by pressing star followed by 1 on your telephone keypad. If you change your mind, please press star followed by 2. I would now like to hand you over to Laura Nichols to begin. Laura, please go ahead when you're ready.

Thank you, and good morning, everyone. Yesterday, we issued a press release announcing achievement of the primary endpoint of a Phase III dry eye chamber trial of Aproxilab, an investigational new drug for the treatment of dry eye disease. A copy of the press release is available on the Investor in Media section of our website, www.aldera.com. The press release contains important information and should be read and considered in conjunction with the slides presented in prepared remarks made on today's call. With me today to discuss the top line results is Dr. Todd Brady, President and Chief Executive Officer of LDRRA. Turning to slide two. This presentation and various remarks which may be made during this presentation contain forward-looking statements regarding LDRRA, its investigational drug candidate, Roproxilab, and its plans, expectations, and opportunities, including regulatory and commercial activities. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause Eldera's actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. These statements are based upon the information available to Eldera today and reflect Eldera's current views with respect to the future events and are based on assumptions and subject to risks and uncertainties, including the outcome and timing of the FDA's review, acceptance, and or approval of a potential NDA resubmission for Reproxilab and the adequacy of the data contained therein. Aldera assumes no obligation to update oral or written statements made today as circumstances change. Future events and actual results could differ materially from those projected in the company's forward-looking statements, including the results of operations and financial position. Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail in the press release issued this morning. and in our filings with the Security and Exchange Commission. I would now like to turn your attention to slide three and introduce Dr. Braden.

Thank you, Laura. We are thrilled to announce the positive results from our second phase three dry eye chamber trial to assess the activity of Reproxilab in reducing ocular discomfort associated with dry eye disease. Like the prior dry eye chamber trial relative to vehicle treatment, there was a highly statistically significant reduction in ocular discomfort following treatment with topical ocular reproxilab. And the results provide further support for a number of clinical trials highlighting the potential rapid clinical effect of reproxilab on reducing ocular discomfort. And we hope we'll enable NDA resubmission mid-year. To our knowledge, Reproxilab remains the first investigational drug with pivotal data supportive of acute and chronic activity in reducing symptoms of dry eye disease. As a way of background, following review of a new drug application or NDA of topical ocular Reproxilab for the treatment of dry eye disease, The FDA issued a complete response letter in November of 2023, which stated that at least one additional adequate and well-controlled study to demonstrate a positive effect on the treatment of ocular symptoms of dry eye needed to be conducted. The letter did not identify any other review issues. Following FDA feedback under the special protocol assessment program and based on additional comments, We initiated a phase three dry eye chamber trial designed to satisfy the FDA's resubmission requirements. The trial achieved the primary endpoint, reproxilapse, statistically reduced ocular discomfort relative to vehicle. The NDA was resubmitted in October of last year. And last month, the FDA again issued a complete response letter which stated that at least one additional adequate and well-controlled study to demonstrate a positive effect on the treatment of ocular symptoms of dry eye needed to be conducted. In particular, the letter identified ocular discomfort baseline differences across treatment arms. Based in part on feedback received from the FDA after the CRL, we completed a second dry eye chamber trial designed to assess the effectiveness of Reproxilab in reducing ocular discomfort. The results announced yesterday were highly statistically significant in favor of Reproxilab over vehicle, and importantly, no notable differences in ocular discomfort baselines were observed between treatment groups. We also completed a field trial of Raproxilab, which while numerically in favor of Raproxilab and consistent with prior field trials, did not reach statistical significance. We believe that the recently completed dry eye chamber trial addresses the FDA feedback following review of the previously completed dry eye chamber trial resubmitted in the NDA last year. We have submitted the results of the dry eye chamber trial announced yesterday to the FDA and have requested a Type A meeting to discuss NDA resubmission. Pending the Type A meeting, we expect to resubmit the NDA mid-year consistent with prior guidance. The results of the phase three randomized double-masked vehicle-controlled dry eye chamber trial are presented on slide four. In the trial, which was substantially similar to that of the previously completed dry eye chamber trial, patients received randomized treatment before and during a dry eye chamber of 100 minutes in duration. The dry eye chamber, which is included in draft FDA guidance for drug development in dry eye disease, is a rigorously controlled low humidity environment designed to exacerbate dry eye disease signs and symptoms, which typically peak around 40 to 50 minutes after chamber entry. Unlike field trials, which typically require months of clinical testing and many clinic visits, the dry eye chamber allows for the elimination of variability in humidity, temperature, airborne particulate matter such as pollen, smoke, or pollution, and other factors known to influence dry eye disease. Most importantly, the chamber allows for the acute assessment of changes in signs and symptoms over a period measured in minutes. In this case, 100 minutes versus weeks or months in field trials. The primary endpoint was ocular discomfort score reported by the patients on a scale of zero or no discomfort to 100. the most severe discomfort during the dry eye chamber from 80 to 100 minutes after chamber entry. The FDA considers ocular discomfort a symptom of dry eye disease, and based on our conversations with the FDA regarding the Phase III dry eye chamber trials and analyses, also considers discomfort, dryness, and other commonly assessed symptoms to be substantially similar. Like the previously completed dry eye chamber trial, given that there were no sign requirements in the complete response letter for the NDA resubmission, and thus we believe that sign requirements have been met, ocular discomfort was the sole primary endpoint and there were no secondary or exploratory endpoints. The primary endpoint analysis was assessed using a mixed model for repeated measures across five time points, again, from 80 to 100 minutes after chamber entry. A period beginning 30 minutes after the second and final dose of Reproxilap or vehicle administered 50 minutes after chamber entry. 116 patients were enrolled. 58 received Reproxilap and 58 received vehicle. The primary endpoint of the phase three dry eye chamber trial was achieved with a p-value of 0.002. Although symptoms do not immediately exacerbate after chamber entry and instead exacerbate over time, Ocular's comfort score change from baseline was numerically lower with the Proxilab treatment than with vehicle treatment for all time points within the chamber and all time points during the primary assessment period from 80 to 100 minutes following chamber entry. The Ocular's comfort scores of patients treated with vehicle escalated consistently throughout the chamber In contrast, Ocular's comfort scores of patients treated with Reproxilab escalated at a lower rate after the first dose of drug, indicating prophylactic activity of Reproxilab, and at a substantially lower rate after the second dose of drug, indicating treatment activity of Reproxilab. During the primary endpoint assessment period, the peak change from baseline in the Reproxilab group was more than eight-fold lower than that of the vehicle group. There were no safety concerns identified and Reproxilab was observed to be well tolerated. No patients discontinued the clinical trial due to adverse events. And consistent with other clinical trials of Reproxilab, the most common adverse event was installation site irritation, which was exclusively mild and most commonly lasted less than one minute. To our knowledge, the results from this and the previously completed dry eye chamber trials represent the first positive phase three clinical trials in a dry eye chamber with a symptom as a primary endpoint. And therefore, we believe the results are uniquely supportive of the potential acute clinical effect of Raproxilab in reducing ocular discomfort and dry eye disease. In aggregate, the results are supportive of the rapid symptomological effect of Raproxilab in preventing exacerbation of ocular discomfort. in a setting designed to mimic the flares characteristic of dry eye disease. An issue highlighted in the prior dry eye chamber trial NDA review was an imbalance in ocular discomfort baseline scores across treatment arms, which prior to the treatment chamber was as much as seven points. As illustrated on slide five, No notable differences in baseline scores across treatment arms were observed before either the screening chamber or the treatment chamber. Using a Bayesian approach which models the probability of effectiveness, slide six summarizes the results of the recently completed field trial in conjunction with the two other field trials that we've conducted with the same dosing regimen. While the recently completed field trial did not reach statistical significance, the results numerically favored roproxilab, and in aggregate, the effect profile of roproxilab is statistically favored over that of vehicle. We expect to submit the field trial results to the planned NDA as supportive. Triad disease remains a pervasive and debilitating disease that is growing in prevalence and the clinical need remains for treatments that work quickly with sustained activity. Slide seven highlights the unique rapid activity of Reproxilab, which represents a novel mechanism of action that, based on the clinical data generated to date, potentially influences inflammation, vasomotor control, which could affect redness, and the sensation of discomfort on the ocular surface in patients with dry eye disease. Consistent with the prior dry eye disease chamber trial, yesterday's top line data suggests that in contrast to currently available therapies that require weeks or months for activity, Reproxilab has the potential to reduce ocular discomfort within minutes in a dry eye chamber. As such, Reproxilab continues to represent a potential paradigm shift in the way dry eye patients could be treated relative to standard of care. Slide eight summarizes the basis for NDA resubmission of Reproxilab for the treatment of dry eye disease. Specifically, at least one symptom trial was required by the FDA for resubmission, and the FDA provided feedback on the prior dry eye chamber trial as part of the most recent NDA review, and also the dry eye chamber trial announced yesterday, which achieved the primary endpoint without the baseline imbalance observed in the prior trial Thus, we expect to resubmit an NDA mid-year, consistent with prior guidance. The resubmission review period is expected to be six months. To our barest knowledge in patients with dry disease, Reproxilab is the first investigational drug with pivotal data supportive of acute and chronic activity in reducing symptoms, and the first investigational drug for chronic administration with pivotal data supportive of acute activity in reducing ocular redness. As previously disclosed, we expect that Reproxilab, if approved, could be the first dry eye disease drug for chronic administration with a label that highlights acute and chronic reduction in symptoms and acute reduction in ocular redness, a dry eye disease sign of particular importance to patients. Our clinical and regulatory milestones are summarized on slide nine. In addition to the expected resubmission of the NDA, we expect a variety of trial initiations and completions in a number of diseases characterized by inflammation and metabolic dysfunction, including those that affect the retina, skin, and central nervous system. For the remainder of 2025, we expect initiations of a Phase II clinical trial in atopic dermatitis and a Phase II-III clinical trial in retinitis pigmentosa. and IND submissions for dry age-related macular degeneration, metabolic inflammation. And over 2025 and 2026, we believe our catalyst news flow to be robust. Our pipeline is summarized on slide 10. In addition to dry eye disease, we believe that roproxilab, which is the subject of an option agreement with AbbVie, has completed clinical development for allergic conjunctivitis. pending further discussions with the FDA. If approved for dry eye disease, allergic conjunctivitis, which is one of the most common ocular diseases worldwide, could represent a supplemental NDA submission. If approved for both diseases, Reproxilab would represent the first drug for chronic administration that could be used to treat dry eye disease and allergic conjunctivitis, two persistently disturbing conditions that frequently occur together in the same patients. Importantly, we are well capitalized to execute on our pipeline based on prior guidance, current cash, cash equivalents, and marketable securities of over $100 million as of December 31st are expected to support operations into 2027, including clinical trial results in alcoholic hepatitis, atopic dermatitis, retinitis pigmentosa, dry age-related macular degeneration, Sjogren-Larsen syndrome, and metabolic inflammation. Consistent with prior guidance, our cash runway guidance does not include partnership or product revenue associated with Reproxilab. Operator, I would now like to open the call for questions.

Thank you. We will begin now the question and answer session. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If you change your mind, please press star followed by 2. When preparing to ask your question, please ensure your device is unmuted locally. And our first question comes from Catherine Novak with Jones.

Hi. Morning, Todd. Always a pleasure to be on here talking about dry eye disease phase three studies. Wondering if you can give us a sense of why you think the field trial did not hit STAT-SIG. Was there unusually high vehicle efficacy, changes in methodology, or powering assumption versus prior field trials? Anything you can give would be helpful.

Happy to comment on the field trial. Good morning, Catherine. First of all, I'm thrilled that the Chamber trial worked in the way that it did, because should the drug get approved on our label, we will have one field trial that the FDA has already reviewed and considered acceptable and a chamber trial. And as I mentioned in my prepared comments, the chamber trial highlights acute activity, whereas field trials highlight durable activity over many weeks. I think had the field trial worked and the chamber trial failed, the label would have had two field trials for symptoms, which would be, at least in my opinion, commercially less advantageous for the reasons that I just mentioned. The dry eye trials in general are variable. I think that like psychiatric diseases, most companies run a number of phase three trials to get one or two to work. Over a long period of time, there is considerable variability in environment. As I mentioned in the prepared comments, pollen, particulate matter, temperature, humidity, are all factors that can vary and are impossible to control in field trial settings. I think this is one of the reasons why the FDA recommends in their draft dry eye guidance that chamber trials be used. Those factors can be rigorously controlled in dry eye chamber trials, unlike field trials. I would argue in general, and I think most people in the dry eye field would argue that the variability in field trials is considerable in dry eye disease. This is why we ran three trials to satisfy the FDA's requirement from last year of another positive, the dry eye trial.

Got it. And then if you can just maybe talk about how you think FDA will view the totality of the data, specifically any language in the CRL pertaining to the signs of dry eye. Since Tranquility 1 failed, but we had subsequent positive studies on redness, help us understand, did they have any issue with having one failed and two positive studies to maybe see how they'll view the field versus the chamber trial?

Well, the FDA by law requires two trials to make a claim on a label. And as I said in my prepared comments for redness, we believe we've satisfied the sign requirement. Redness is a unique sign in that commercially it's important. It's important to patients. It may be the only dry eye sign, as I've said over the years, that is important to patients. We all care about how our Eyes look the good news is in the 1st, India review. The FDA gave us credit for 2 redness trials. Even though there were some redness data that weren't as supportive as the 2 trials. For which they gave us credit, I think the same thing applies here. And symptoms again, the law is sponsors must have 2 positive trials to make a claim on a label. That is why the complete response letter said one additional trial, or at least one additional trial. Now we have provided two additional positive dry eye chamber trials. I think it's very clear from the FDA's perspective, at least regarding our discussions with the FDA, that for symptoms, a field trial can satisfy in combination with a chamber trial. The challenge last time, as you know, Catherine, was that we had a baseline imbalance in our prior dry eye chamber trial. We were absolutely thrilled to see that that baseline imbalance did not occur in the trial that we announced yesterday. The results are positive. They are consistent. And I think, at least in my opinion, it's very, very clear that Reproxilab is highly active relative to vehicle and preventing ocular discomfort exacerbation in a chamber, which mimics, as I mentioned, the kinds of flares that are characteristic of dry eye disease.

Got it. Thanks for clarifying, Todd, and thanks for taking my questions.

My pleasure, Catherine. Take care.

And our next question comes from Tom Schrader with BTIG.

Good morning. Congratulations. This newest trial, is the overall treatment effect about the same as the prior trial? I think it's considerably bigger. Is that right? And how do you explain that? And then one sort of nagging question. There's always a comment somewhere in your presentation about irritation with the drops. We've been hearing a little bit about that. How bad is it? Do you think it's a commercial issue? And do you ever have a patient that won't take the second drop, which I suppose is the most relevant question? Thanks.

Right. Thanks, Tom. Good morning. Good questions. In every respect, The trial we announced yesterday is superior to the prior dry eye chamber trial, not only with regard to the lack of a baseline imbalance, but also with regard to the effect size. You are correct if you go back and look at those data that we announced, I guess, in August of last year. The drug did better, the Proxilab did better relative to a vehicle than it did in the prior trial. I think the explanation for that kind of improved activity has to do with the variability of dry eye disease that I highlighted in response to Catherine's question. We also used a different chamber. The two dry eye chamber trials were conducted at different clinical sites that may have had something to do with the difference in results. The first chamber was performed in Canada. The second chamber was performed or executed here in the United States. Irritation is common with everything that goes into your eye, whether it be a particulate like pollen or a solution like shower water. Your eye is designed to let you know that there's something in it so that you can get that something out of it. Every drug has some form of irritation, you'll see on every label for any topical ophthalmic medication that the number one side effect is irritation. As I mentioned in my comments, the irritation is exclusively mild. There is no moderate. There is no severe. And the most common duration is less than a minute. I think over 80% of patients would describe it over less than a minute. I'd like to remind people that the primary endpoint of the prior chamber trial and the primary endpoint of the current chamber trial is discomfort. So whatever irritation there is, is quickly reversed relative to vehicle, which has no drug in it, as you know. So I think all that in combination suggests that For dry eye disease patients who are used to taking eye drops, all of which have irritation, we shouldn't see much of an issue here with aproxilab.

Okay, great. Thanks for the color, Todd.

Thanks, Tom.

And our next question comes from Matthew Caulfield with Pages Windrider.

Hi, Todd. Good morning. I'm excited to see the advancements this morning. I wanted to ask about the top considerations for timing and potential execution from AbbVie for the option agreement. And then separately, as we think about the dry eye landscape, what criteria could select patients as the best fit for receiving Riproxilab versus trying any alternatives in terms of kind of what that selection process could look like? Thanks again.

Thanks, Matt. Good morning. Thanks for the kind words. I could talk about that last question for an hour, but I'll spare the audience. Let's talk about timing first. I'll focus on NDA submission, and then I'll touch on the disclosed option agreement with AbbVie. The submission of the NDA is planned for mid-year. That's consistent with our prior guidance. As I mentioned in my prepared comments, we've taken the somewhat unusual step of submitting the data from this trial announced yesterday to the FDA. I think that is an important and strong signal that the data from this trial are, at least from our perspective, valid and strong. And then we intend to discuss those data in a type A meeting that we have requested. As you know, after you receive a CRL, you have the opportunity within 90 days to request a type A meeting. Once that request goes in, the meeting is held within 30 days. The agenda of that meeting essentially is in the last, in the review of a dry eye chamber trial, You highlighted an issue that had to do with baseline imbalance primarily, and here are our data. Here are the results from another dry eye trial that are consistent with the prior dry eye chamber trial. We performed both trials at different locations. And as I said, in response to Tom's question, as Tom highlighted, the differences between drug and vehicle are even more significant. in this trial. So, in a sense, we do plan to submit mid-year based on this Type A meeting, and the idea is just to make sure with the FDA that the prior review really doesn't apply to the data from the trial we announced yesterday. AbbVie, as we have publicly disclosed, and this agreement has actually been filed. has the right to exercise an option to a co-development, co-promotion agreement for Reproxilab for all indications. That option expires 10 days after approval, whenever approval occurs. If we submit mid-year, we expect for the review to take six months, which is per protocol for the FDA for NDA resubmissions. And so, should the drug be approved, then AbbVie would have 10 days to exercise the option. Finally, the idea that there are other dry eye products out there available for patient use relative to our new, potential new entrance of roproxilab is interesting. I think, as I said in my prepared comments, there are really no good options that have been proven to work quickly. No one wants to wait two weeks for activity. No one wants to wait four weeks for activity. And so there's a real opportunity in the dry eye market for a drug that works quickly. And that is what the data suggests from the trial announced yesterday and the prior dry eye trial, that at least there is the potential for aproxilab to make patients feel or potentially look better within minutes. That is a paradigm shift. That is what we tried to highlight on slide seven, notwithstanding what we hope is a temporary delay in approval for Reproxilab. Reproxilab remains the only drug, in our perspective, that has proven acute activity. Which patients would qualify? Well, I guess those patients that want acute activity, which is more or less all patients. I don't see any reason why physicians or optometrists would segment patients for one particular drug over another Patients are customers, and most patients want to feel better now, not later.

Excellent. Very helpful. I really appreciate that.

Yeah, thanks, Matt.

Just as a reminder, if you'd like to ask a question, it's star 1 on your telephone keypad. Our next question comes from Yael Jan with Lalo and Company.

Good morning, Todd, and congrats on the outcome. Just two questions here. The first one is for the field trial that shows week one to six. I'm just curious whether that's average, the measurement over, you know, average of each week or just to the end of the study period. Can I have a follow-up?

Right.

Yale, the data on slide six for the field trials really is designed to show the aggregate effect of three field trials. The one we announced yesterday in addition to two prior 12-week trials. As you correctly point out, the one announced yesterday was six weeks in duration. The prior field trials were 12 weeks in duration. which is why the x-axis on that graph says weeks one through six. Just look at the first six weeks where the bulk of activity seems to occur. I think you get a very robust effect profile when considering all trials in aggregate.

Okay, great. That's very helpful in the details. And then maybe one more question here, which is that if It's sort of clear that the Reproxilab has a very acute effect, but also you mentioned about the chronic effect value. So would you elaborate a little bit more on that, given that most of the drug is only on the chronic but not necessarily acute human effects? And thanks.

Correct. Yes. Notwithstanding my highlighting the acute activity of Reproxilab, The drug will be approved for chronic administration. In dry eye disease, that I'm aware, the only drug that's not approved for chronic administration is an ocular steroid, a topical steroid, which you can't use chronically due to toxicity concerns, which include cataracts and glaucoma, among other issues. the chronic activity or the durability of Reproxilab really is highlighted in the field trials. And to your previous question, the data on slide six are sort of the average, reflect the average over six weeks of use. And the field trial that the FDA has reviewed and found acceptable already is a 12-week trial. So I think we have relative to our competition plenty of chronic data that support durability. And now I would say two symptom trials in a dry eye chamber that support acute activity.

Okay, great. This is very helpful. And again, congrats on the data and the best luck for the patient.

Thank you, Yale.

And our next question comes from Kelly T. with Jefferies.

Good morning, Todd. This is Jose for Kelly. Thanks for taking my question. It's more of a clarification question. When FDA raised concerns about baseline differences between the placebo and treatment alarms, were they referring to the first measurement post chamber entry, either screening or treatment specifically, or was it differences in baseline prior to any chamber entry? And also on the type A meeting, I believe you mentioned it had already been scheduled for 30 days last month. Is it very soon it's happening soon, or is it a good pushback? Any call you can provide on that front will be helpful.

For sure.

Thanks.

Let me begin with the type A meeting. I'm glad you brought that up. After the CRL last month, the FDA, provided further feedback on the two trials that we announced yesterday. And because the FDA provided further feedback, which was productive and allowed us to lock the databases and read out the trials, we no longer needed to hold a type A meeting immediately after the CRL. So we switched strategy to go ahead, read out the trials based on the feedback provided from the FDA, and then discuss the data from the trials at the Type A meeting. As I mentioned in my prepared comments, that meeting has been requested, and the data from the chamber trial announced yesterday has been submitted directly to the FDA. Your first question was about baseline differences As you pointed out, there are two chambers in these trials. There is a screening chamber where patients receive vehicle, and there is a randomized treatment chamber where patients are first randomized and then either receive vehicle or reproxilab. Thus, there are two baselines. There is a baseline before the screening chamber, and there is a baseline before the randomized treatment chamber. An illustration of that is on slide 5. where the two baselines are plotted across treatment arms for the trial that was announced yesterday. In the previous dry eye chamber trial, the FDA noted a seven-point difference before the randomized treatment chamber, which is not ideal. Typically, sponsors account for baseline differences by controlling for baseline in a statistical model as a covariate. You also attempt to mitigate differences in randomization and baseline by randomizing a subject. But sometimes, particularly in smaller trials of 100 subjects or so, you will see by chance differences in baseline. I believe the FDA's point in the last NDA review was because of this baseline difference, It's difficult to distinguish the effect of drug from the effect of baseline, which is why we're thrilled to see the data on slide five, where we have confirmed the previous dry eye chamber trial in terms of effect and statistical significance without any notable differences in baseline across treatment arms before either of the AI chambers.

Very helpful, thank you.

Thank you.

And that was our final question, so I will hand back over to Todd Brady for any final comments.

Well, thank you all for joining us this morning. We appreciate your time and interest in Alderaan. As always, we look forward to updating you on further developments.

This concludes today's Conference call. Thank you everyone for joining. You may now disconnect.